The extra cost is probably related to the additional runs of pipework required. The additional runs of pipework will probably mean that you may have to leave your hot tap running that bit longer before the water is hot enough. I can't see any other disadvantages, other than it's handy to have the HP close hand if you step out of the shower and there's no clean towel to hand! With all the extra lengths of pipework involved it would be wise to have all pipe connections to the cylinder lagged, throughout their length to minimise heat losses. If you could afford to put in a small airing cupboard upstairs as well that would be the best solution.You could put in a small rad, some spare shelving and have extra airing space and have towels and clothes etc close to the bedrooms. I'd figure an extra few hundred to do this would be money well spent.